Tennies Clinic uses client-visits as its measure of activity. During November, t

Question

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,350 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Data used in budgeting:

Actual results for November:

The activity variance for personnel expenses in November would be closest to:

Fixed element per month Variable element per client-visit Revenue - $ 35.50 Personnel expenses $ 29,600 $ 10.50 Medical supplies 1,250 5.90 Occupancy expenses 7,700 2.00 Administrative expenses 6,000 0.40 Total expenses $ 44,550 $ 18.80

Explanation / Answer

Activity variance for personnel expense =Planning budget expense - Flexible budget expense

= (3350*10.5+29600)-(3340*10.5+29600)

Activity variance for personnel expense = 105 F

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